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☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31,
2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number
1-12298
(Regency Centers Corporation)
Commission File Number
0-24763
(Regency Centers, L.P.)
REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
florida
(REGENCY CENTERS CORPORATION)
59-3191743
Delaware
(REGENCY CENTERS, L.P)
59-3429602
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Independent Drive
,
Suite 114
Jacksonville
,
Florida
32202
(
904
)
598-7000
(Address of principal executive offices) (zip code)
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 par value
REG
The Nasdaq Stock Market LLC
6.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share
REGCP
The Nasdaq Stock Market LLC
5.875% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share
REGCO
The Nasdaq Stock Market LLC
Regency Centers, L.P.
Title of each class
Trading Symbol
Name of each exchange on which registered
None
N/A
N/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation
Yes
☒
No
☐
Regency Centers, L.P.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (
§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Regency Centers Corporation
Yes
☒
No
☐
Regency Centers, L.P.
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Regency Centers Corporation:
Large accelerated filer
☒
Accelerated filer
☐
Emerging growth company
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Regency Centers, L.P.:
Large accelerated filer
☐
Accelerated filer
☐
Emerging growth company
☐
Non-accelerated filer
☒
Smaller reporting company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation
Yes
☐
No
☐
Regency Centers, L.P.
Yes
☐
No
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation
Yes
☐
No
☒
Regency Centers, L.P.
Yes
☐
No
☒
The number of shares outstanding of Regency Centers Corporation's common stock was
181,529,289
as of
April 30, 2025.
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2025, of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to "Regency Centers Corporation" or the "Parent Company" mean Regency Centers Corporation and its controlled subsidiaries and references to "Regency Centers, L.P." or the "Operating Partnership" mean Regency Centers, L.P. and its controlled subsidiaries. The terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean the Parent Company, the Operating Partnership and their controlled subsidiaries, collectively.
The Parent Company is a real estate investment trust ("REIT") and the general partner of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management. The Operating Partnership's capital includes general and limited common partnership units ("Common Units"). As of March 31, 2025, the Parent Company owned approximately 99.4% of the Common Units in the Operating Partnership. The remaining Common Units, which are all limited Common Units, are owned by third party investors. In addition to the Common Units, the Operating Partnership has also issued two series of preferred units: the 6.250% Series A Cumulative Redeemable Preferred Units (the "Series A Preferred Units") and the 5.875% Series B Cumulative Redeemable Preferred Units (the "Series B Preferred Units"). The Parent Company currently owns all of the Series A Preferred Units and Series B Preferred Units. The Series A Preferred Units and Series B Preferred Units are sometimes referred to collectively as the "Preferred Units."
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
•
Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•
Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and
•
Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as a single business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company, and officers and employees of the Operating Partnership.
The Company believes it is important to understand the key differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of Common and Preferred Units of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. Except for $200 million of unsecured private placement debt, the Parent Company does not directly hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership, directly or indirectly, is also the co-issuer and guarantor of the Parent Company's $200 million unsecured private placement debt referenced above. The Operating Partnership holds all the assets of the Company and ownership of the Company's subsidiaries and equity interests in its joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for Common Units or Preferred Units, the Operating Partnership generates all other capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of Common Units and Preferred Units.
Shareholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes the Common Units and the Preferred Units. The limited partners' Common Units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of shareholders' equity in noncontrolling interests in the Parent Company's financial statements. The Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of the general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this Report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this Report refers to actions or holdings as being actions or holdings of the Company.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while shareholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.
Cash, cash equivalents, and restricted cash, including $
3,444
and $
5,601
of restricted cash at March 31, 2025 and December 31, 2024, respectively
78,537
61,884
Tenant and other receivables, net
250,210
255,495
Deferred leasing costs, less accumulated amortization of $
133,046
and $
131,080
at March 31, 2025 and December 31, 2024, respectively
85,272
79,911
Acquired lease intangible assets, less accumulated amortization of $
402,274
and $
395,209
at March 31, 2025 and December 31, 2024, respectively
231,526
229,983
Right of use assets, net
320,317
322,287
Other assets
299,717
289,046
Total assets
$
12,560,070
12,391,961
Liabilities and Equity
Liabilities:
Notes payable, net
$
4,376,240
4,343,700
Unsecured credit facility
265,000
65,000
Accounts payable and other liabilities
340,997
392,302
Acquired lease intangible liabilities, less accumulated amortization of $
227,051
and $
222,052
at March 31, 2025 and December 31, 2024, respectively
374,606
364,608
Lease liabilities
243,923
244,861
Tenants' security, escrow deposits and prepaid rent
82,864
81,183
Total liabilities
5,683,630
5,491,654
Commitments and contingencies
—
—
Equity:
Shareholders' equity:
Preferred stock $
0.01
par value per share,
30,000,000
shares authorized;
9,000,000
shares issued and outstanding, in the aggregate, in Series A and Series B at March 31, 2025 and December 31, 2024
225,000
225,000
Common stock $
0.01
par value per share,
220,000,000
shares authorized;
181,525,936
and
181,361,454
shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively
1,815
1,814
Treasury stock at cost,
476,037
and
479,251
shares held at March 31, 2025 and December 31, 2024, respectively
(
29,133
)
(
28,045
)
Additional paid-in-capital
8,505,489
8,503,227
Accumulated other comprehensive (loss) income
(
1,715
)
2,226
Distributions in excess of net income
(
2,001,878
)
(
1,980,076
)
Total shareholders' equity
6,699,578
6,724,146
Noncontrolling interests:
Exchangeable operating partnership units, aggregate redemption value of $
80,890
and $
81,076
at March 31, 2025 and December 31, 2024, respectively
40,584
40,744
Limited partners' interests in consolidated partnerships
136,278
135,417
Total noncontrolling interests
176,862
176,161
Total equity
6,876,440
6,900,307
Total liabilities and equity
$
12,560,070
12,391,961
The accompanying notes are an integral part of the consolidated financial statements.
1
REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
For the periods ended March 31, 2025, and 2024
(in thousands, except per share data)
(unaudited)
Three months ended March 31,
2025
2024
Revenues:
Lease income
$
371,079
353,106
Other property income
3,021
4,350
Management, transaction, and other fees
6,812
6,396
Total revenues
380,912
363,852
Operating expenses:
Depreciation and amortization
96,774
97,585
Property operating expense
68,459
63,274
Real estate taxes
46,360
44,307
General and administrative
21,600
26,132
Other operating expenses
1,688
2,643
Total operating expenses
234,881
233,941
Other expense, net:
Interest expense, net
48,013
42,868
Gain on sale of real estate, net of tax
(
101
)
(
11,403
)
Loss on early extinguishment of debt
—
180
Net investment loss (income)
761
(
2,431
)
Total other expense, net
48,673
29,214
Income before equity in income of investments in real estate partnerships
97,358
100,697
Equity in income of investments in real estate partnerships
14,495
11,961
Net income
111,853
112,658
Noncontrolling interests:
Exchangeable operating partnership units
(
642
)
(
642
)
Limited partners' interests in consolidated partnerships
(
1,624
)
(
2,242
)
Net income attributable to noncontrolling interests
(
2,266
)
(
2,884
)
Net income attributable to the Company
109,587
109,774
Preferred stock dividends
(
3,413
)
(
3,413
)
Net income attributable to common shareholders
$
106,174
106,361
Net income attributable to common shareholders:
Per common share - basic
$
0.59
0.58
Per common share - diluted
$
0.58
0.58
The accompanying notes are an integral part of the consolidated financial statements.
2
REGENCY CENTERS CORPORATION
Consolidated
Statements of Comprehensive Income
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
Three months ended March 31,
2025
2024
Net income
$
111,853
112,658
Other comprehensive (loss) income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments
(
2,648
)
8,593
Reclassification adjustment of derivative instruments included in net income
(
1,745
)
(
2,367
)
Unrealized gain (loss) on available-for-sale debt securities
194
(
119
)
Other comprehensive (loss) income
(
4,199
)
6,107
Comprehensive income
107,654
118,765
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests
2,266
2,884
Other comprehensive (loss) income attributable to noncontrolling interests
(
258
)
334
Comprehensive income attributable to noncontrolling interests
2,008
3,218
Comprehensive income attributable to the Company
$
105,646
115,547
The accompanying notes are an integral part of the consolidated financial statements.
3
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2025 and 2024
(in thousands, except per share data)
(unaudited)
Noncontrolling Interests
Preferred
Stock
Common
Stock
Treasury
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Distributions
in Excess of
Net Income
Total
Shareholders'
Equity
Exchangeable
Operating
Partnership
Units
Limited
Partners'
Interest in
Consolidated
Partnerships
Total
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2023
$
225,000
1,846
(
25,488
)
8,704,240
(
1,308
)
(
1,871,603
)
7,032,687
42,195
117,053
159,248
7,191,935
Net income
—
—
—
—
—
109,774
109,774
642
2,242
2,884
112,658
Other comprehensive income
Other comprehensive income before reclassification
—
—
—
—
7,987
—
7,987
48
439
487
8,474
Amounts reclassified from accumulated other comprehensive income
—
—
—
—
(
2,214
)
—
(
2,214
)
(
13
)
(
140
)
(
153
)
(
2,367
)
Deferred compensation plan, net
—
—
(
833
)
833
—
—
—
—
—
—
—
Amortization of equity awards
—
2
—
6,574
—
—
6,576
—
—
—
6,576
Tax withholding on stock-based compensation
—
—
—
(
8,578
)
—
—
(
8,578
)
—
—
—
(
8,578
)
Common stock issued under dividend reinvestment plan
—
—
—
158
—
—
158
—
—
—
158
Common stock issued for exchangeable units exchanged
—
—
—
529
—
—
529
(
529
)
—
(
529
)
—
Contributions from partners
—
—
—
—
—
—
—
—
1,472
1,472
1,472
Distributions to partners
—
—
—
—
—
—
—
—
(
4,364
)
(
4,364
)
(
4,364
)
Dividends declared:
Preferred stock/unit (Series A: $
0.390625
per share/unit; Series B: $
0.367200
per share/unit)
—
—
—
—
—
(
3,413
)
(
3,413
)
—
—
—
(
3,413
)
Common stock/unit ($
0.670
per share/unit)
—
—
—
—
—
(
123,795
)
(
123,795
)
(
737
)
—
(
737
)
(
124,532
)
Balance at March 31, 2024
$
225,000
1,848
(
26,321
)
8,703,756
4,465
(
1,889,037
)
7,019,711
41,606
116,702
158,308
7,178,019
Balance at December 31, 2024
$
225,000
1,814
(
28,045
)
8,503,227
2,226
(
1,980,076
)
6,724,146
40,744
135,417
176,161
6,900,307
Net income
—
—
—
—
—
109,587
109,587
642
1,624
2,266
111,853
Other comprehensive income
Other comprehensive income before reclassification
—
—
—
—
(
2,289
)
—
(
2,289
)
(
20
)
(
145
)
(
165
)
(
2,454
)
Amounts reclassified from accumulated other comprehensive income
—
—
—
—
(
1,652
)
—
(
1,652
)
(
8
)
(
85
)
(
93
)
(
1,745
)
Adjustment for noncontrolling interests
—
—
—
2,210
—
—
2,210
(
2,210
)
—
(
2,210
)
—
Deferred compensation plan, net
—
—
(
1,088
)
1,088
—
—
—
—
—
—
—
Amortization of equity awards
—
1
—
5,547
—
—
5,548
—
—
—
5,548
Tax withholding on stock-based compensation
—
—
—
(
6,760
)
—
—
(
6,760
)
—
—
—
(
6,760
)
Common stock issued under dividend reinvestment plan
—
—
—
177
—
—
177
—
—
—
177
Contributions from partners
—
—
—
—
—
—
—
2,210
2,977
5,187
5,187
Distributions to partners
—
—
—
—
—
—
—
—
(
3,510
)
(
3,510
)
(
3,510
)
Dividends declared:
Preferred stock stock/unit (Series A: $
0.390625
per share/unit;
Series B: $
0.36720
0 per share/unit)
—
—
—
—
—
(
3,413
)
(
3,413
)
—
—
—
(
3,413
)
Common stock/unit ($
0.705
per share/unit)
—
—
—
—
—
(
127,976
)
(
127,976
)
(
774
)
—
(
774
)
(
128,750
)
Balance at March 31, 2025
$
225,000
1,815
(
29,133
)
8,505,489
(
1,715
)
(
2,001,878
)
6,699,578
40,584
136,278
176,862
6,876,440
The accompanying notes are an integral part of the consolidated financial statements.
4
REGENCY
CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
Three months ended March 31,
2025
2024
Cash flows from operating activities:
Net income
$
111,853
112,658
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
96,774
97,585
Amortization of deferred financing costs and debt premiums
3,334
2,762
Amortization of above and below market lease intangibles, net
(
6,215
)
(
5,287
)
Stock-based compensation, net of capitalization
4,966
6,294
Equity in income of investments in real estate partnerships
(
14,495
)
(
11,961
)
Gain on sale of real estate, net of tax
(
101
)
(
11,403
)
Loss on early extinguishment of debt
—
180
Distribution of earnings from investments in real estate partnerships
16,076
16,960
Deferred compensation (income) expense
(
521
)
2,089
Realized and unrealized loss (gain) on investments
686
(
2,358
)
Changes in assets and liabilities:
Tenant and other receivables
9,051
1,220
Deferred leasing costs
(
1,748
)
(
3,714
)
Other assets
(
16,176
)
(
15,724
)
Accounts payable and other liabilities
(
43,735
)
(
19,410
)
Tenants' security, escrow deposits and prepaid rent
1,282
(
2,133
)
Net cash provided by operating activities
161,031
167,758
Cash flows from investing activities:
Acquisition of operating real estate, net of cash acquired of $
787
(
83,232
)
—
Real estate development and capital improvements
(
101,386
)
(
60,850
)
Proceeds from sale of real estate
—
30,033
Proceeds from property insurance casualty claims
—
4,110
Issuance of notes receivable
—
(
29,830
)
Collection of notes receivable
120
1,561
Investments in real estate partnerships
(
230
)
(
4,156
)
Return of capital from investments in real estate partnerships
—
3,152
Dividends on investment securities
988
122
Purchase of investment securities
(
2,233
)
(
92,527
)
Proceeds from sale of investment securities
5,825
6,049
Net cash used in investing activities
(
180,148
)
(
142,336
)
Cash flows from financing activities:
Tax withholding on stock-based compensation
(
6,760
)
(
8,730
)
Proceeds from sale of treasury stock
462
210
Contributions from noncontrolling interests
2,977
1,472
Distributions to and redemptions of noncontrolling interests
(
3,510
)
(
4,364
)
Distributions to exchangeable operating partnership unit holders
(
773
)
(
742
)
Dividends paid to common shareholders
(
127,684
)
(
123,507
)
Dividends paid to preferred shareholders
(
3,413
)
(
3,413
)
Proceeds from issuance of fixed rate unsecured notes, net of debt discount
—
398,468
Proceeds from unsecured credit facilities
280,000
132,419
Repayment of unsecured credit facilities
(
80,000
)
(
254,419
)
Proceeds from notes payable
10,000
—
Repayment of notes payable
(
32,787
)
(
7,597
)
Scheduled principal payments
(
2,548
)
(
3,183
)
Payment of financing costs
(
194
)
(
13,289
)
Net cash provided by financing activities
35,770
113,325
Net increase in cash and cash equivalents and restricted cash
16,653
138,747
Cash and cash equivalents and restricted cash at beginning of the period
61,884
91,354
Cash and cash equivalents and restricted cash at end of the period
$
78,537
230,101
5
Three months ended March 31,
2025
2024
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $
2,112
and $
1,656
in 2025 and 2024, respectively)
$
64,540
47,981
Cash paid for income taxes, net of refunds
$
—
6,070
Supplemental disclosure of non-cash transactions:
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid
$
131,020
126,807
Right of use assets obtained in exchange for new operating lease liabilities
$
—
829
Sale of leased asset in exchange for net investment in sales-type lease
$
—
703
Acquisition of operating real estate:
Tenant and other receivable and other assets
$
593
—
Acquired lease intangible assets
$
9,725
—
Notes payable assumed in acquisition, at fair value
$
40,060
—
Intangible liabilities, Accounts payable and other liabilities
$
18,957
—
Acquisition of unconsolidated real estate investments:
Tenant and other receivable and other assets
$
941
—
Acquired lease intangible assets
$
4,308
—
Notes payable assumed in acquisition, at fair value
$
16,749
—
Intangible liabilities, Accounts payable and other liabilities
$
1,119
—
Change in accrued capital expenditures
$
13,144
1,619
Stock-based compensation capitalized
$
583
434
The accompanying notes are an integral part of the consolidated financial statements.
6
REGENCY CENTERS, L.P.
Consolidated
Balance Sheets
March 31, 2025
and
December 31, 2024
(in thousands, except unit data)
2025
2024
Assets
(unaudited)
Net real estate investments:
Real estate assets, at cost
$
13,910,190
13,698,419
Less: accumulated depreciation
3,037,614
2,960,399
Real estate assets, net
10,872,576
10,738,020
Investments in sales-type leases, net
16,520
16,291
Investments in real estate partnerships
389,175
399,044
Net real estate investments
11,278,271
11,153,355
Properties held for sale, net
16,220
—
Cash, cash equivalents, and restricted cash, including $
3,444
and $
5,601
of restricted cash at March 31, 2025 and December 31, 2024, respectively
78,537
61,884
Tenant and other receivables, net
250,210
255,495
Deferred leasing costs, less accumulated amortization of $
133,046
and $
131,080
at March 31, 2025 and December 31, 2024, respectively
85,272
79,911
Acquired lease intangible assets, less accumulated amortization of $
402,274
and $
395,209
at March 31, 2025 and December 31, 2024, respectively
231,526
229,983
Right of use assets, net
320,317
322,287
Other assets
299,717
289,046
Total assets
$
12,560,070
12,391,961
Liabilities and Capital
Liabilities:
Notes payable, net
$
4,376,240
4,343,700
Unsecured credit facility
265,000
65,000
Accounts payable and other liabilities
340,997
392,302
Acquired lease intangible liabilities, less accumulated amortization of $
227,051
and $
222,052
at March 31, 2025 and December 31, 2024, respectively
374,606
364,608
Lease liabilities
243,923
244,861
Tenants' security, escrow deposits and prepaid rent
82,864
81,183
Total liabilities
5,683,630
5,491,654
Commitments and contingencies
—
—
Capital:
Partners' capital:
Preferred units $
0.01
par value per unit,
30,000,000
units authorized;
9,000,000
units issued and outstanding, in the aggregate, in Series A and Series B at March 31, 2025 and December 31, 2024
225,000
225,000
General partner's common units,
181,525,936
and
181,361,454
units issued and outstanding at March 31, 2025 and December 31, 2024, respectively
6,476,293
6,496,920
Limited partners' common units,
1,096,659
and
1,096,659
units issued and outstanding at March 31, 2025 and December 31, 2024 respectively
40,584
40,744
Accumulated other comprehensive (loss) income
(
1,715
)
2,226
Total partners' capital
6,740,162
6,764,890
Noncontrolling interest: Limited partners' interests in consolidated partnerships
136,278
135,417
Total capital
6,876,440
6,900,307
Total liabilities and capital
$
12,560,070
12,391,961
The accompanying notes are an integral part of the consolidated financial statements.
7
REGENCY CENTERS, L.P.
Consolidated
Statements of Operations
For the periods ended March 31, 2025, and 2024
(in thousands, except per unit data)
(unaudited)
Three months ended March 31,
2025
2024
Revenues:
Lease income
$
371,079
353,106
Other property income
3,021
4,350
Management, transaction, and other fees
6,812
6,396
Total revenues
380,912
363,852
Operating expenses:
Depreciation and amortization
96,774
97,585
Property operating expense
68,459
63,274
Real estate taxes
46,360
44,307
General and administrative
21,600
26,132
Other operating expenses
1,688
2,643
Total operating expenses
234,881
233,941
Other expense, net:
Interest expense, net
48,013
42,868
Gain on sale of real estate, net of tax
(
101
)
(
11,403
)
Loss on early extinguishment of debt
—
180
Net investment loss (income)
761
(
2,431
)
Total other expense, net
48,673
29,214
Income before equity in income of investments in real estate partnerships
97,358
100,697
Equity in income of investments in real estate partnerships
14,495
11,961
Net income
111,853
112,658
Limited partners' interests in consolidated partnerships
(
1,624
)
(
2,242
)
Net income attributable to the Partnership
110,229
110,416
Preferred unit distributions
(
3,413
)
(
3,413
)
Net income attributable to common unit holders
$
106,816
107,003
Net income attributable to common unit holders:
Per common unit - basic
$
0.59
0.58
Per common unit - diluted
$
0.58
0.58
The accompanying notes are an integral part of the consolidated financial statements.
8
REGENCY CENTERS, L.P.
Consolidated Statements
of Comprehensive Income
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
Three months ended March 31,
2025
2024
Net income
$
111,853
112,658
Other comprehensive (loss) income:
Effective portion of change in fair value of derivative instruments:
Effective portion of change in fair value of derivative instruments
(
2,648
)
8,593
Reclassification adjustment of derivative instruments included in net income
(
1,745
)
(
2,367
)
Unrealized gain (loss) on available-for-sale debt securities
194
(
119
)
Other comprehensive (loss) income
(
4,199
)
6,107
Comprehensive income
107,654
118,765
Less: comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests
1,624
2,242
Other comprehensive (loss) income attributable to noncontrolling interests
(
230
)
299
Comprehensive income attributable to noncontrolling interests
1,394
2,541
Comprehensive income attributable to the Partnership
$
106,260
116,224
The accompanying notes are an integral part of the consolidated financial statements.
9
REGENCY CENTERS, L.P.
Consolidated
Statements of Capital
For the three months ended March 31, 2025 and 2024
(in thousands)
(unaudited)
General Partner Preferred
and Common Units
Limited
Partners
Accumulated
Other
Comprehensive
Income (Loss)
Total
Partners'
Capital
Noncontrolling Interests in
Limited Partners' Interest in
Consolidated Partnerships
Total
Capital
Balance at December 31, 2023
$
7,033,995
42,195
(
1,308
)
7,074,882
117,053
7,191,935
Net income
109,774
642
—
110,416
2,242
112,658
Other comprehensive income
Other comprehensive income before reclassification
—
48
7,987
8,035
439
8,474
Amounts reclassified from accumulated other comprehensive income
—
(
13
)
(
2,214
)
(
2,227
)
(
140
)
(
2,367
)
Contributions from partners
—
—
—
—
1,472
1,472
Distributions to partners
(
123,795
)
(
737
)
—
(
124,532
)
(
4,364
)
(
128,896
)
Preferred unit distributions
(
3,413
)
—
—
(
3,413
)
—
(
3,413
)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization
6,576
—
—
6,576
—
6,576
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances
(
8,420
)
—
—
(
8,420
)
—
(
8,420
)
Exchangeable operating partnership units exchanged for common stock of Parent Company
529
(
529
)
—
—
—
—
Balance at March 31, 2024
$
7,015,246
41,606
4,465
7,061,317
116,702
7,178,019
Balance at December 31, 2024
$
6,721,920
40,744
2,226
6,764,890
135,417
6,900,307
Net income
109,587
642
—
110,229
1,624
111,853
Other comprehensive income
Other comprehensive income before reclassification
—
(
20
)
(
2,289
)
(
2,309
)
(
145
)
(
2,454
)
Amounts reclassified from accumulated other comprehensive income
—
(
8
)
(
1,652
)
(
1,660
)
(
85
)
(
1,745
)
Adjustment for noncontrolling interests in the Operating Partnership
2,210
(
2,210
)
—
—
—
—
Contributions from partners
—
2,210
—
2,210
2,977
5,187
Distributions to partners
(
127,976
)
(
774
)
—
(
128,750
)
(
3,510
)
(
132,260
)
Preferred unit distributions
(
3,413
)
—
—
(
3,413
)
—
(
3,413
)
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization
5,548
—
—
5,548
—
5,548
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances
(
6,583
)
—
—
(
6,583
)
—
(
6,583
)
Balance at March 31, 2025
$
6,701,293
40,584
(
1,715
)
6,740,162
136,278
6,876,440
The accompanying notes are an integral part of the consolidated financial statements.
10
REGENCY CENTERS, L.P.
Consolidated Statem
ents of Cash Flows
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
Three months ended March 31,
2025
2024
Cash flows from operating activities:
Net income
$
111,853
112,658
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
96,774
97,585
Amortization of deferred financing costs and debt premiums
3,334
2,762
Amortization of above and below market lease intangibles, net
(
6,215
)
(
5,287
)
Stock-based compensation, net of capitalization
4,966
6,294
Equity in income of investments in real estate partnerships
(
14,495
)
(
11,961
)
Gain on sale of real estate, net of tax
(
101
)
(
11,403
)
Loss on early extinguishment of debt
—
180
Distribution of earnings from investments in real estate partnerships
16,076
16,960
Deferred compensation (income) expense
(
521
)
2,089
Realized and unrealized loss (gain) on investments
686
(
2,358
)
Changes in assets and liabilities:
Tenant and other receivables
9,051
1,220
Deferred leasing costs
(
1,748
)
(
3,714
)
Other assets
(
16,176
)
(
15,724
)
Accounts payable and other liabilities
(
43,735
)
(
19,410
)
Tenants' security, escrow deposits and prepaid rent
1,282
(
2,133
)
Net cash provided by operating activities
161,031
167,758
Cash flows from investing activities:
Acquisition of operating real estate, net of cash acquired of $
787
(
83,232
)
—
Real estate development and capital improvements
(
101,386
)
(
60,850
)
Proceeds from sale of real estate
—
30,033
Proceeds from property insurance casualty claims
—
4,110
Issuance of notes receivable
—
(
29,830
)
Collection of notes receivable
120
1,561
Investments in real estate partnerships
(
230
)
(
4,156
)
Return of capital from investments in real estate partnerships
—
3,152
Dividends on investment securities
988
122
Acquisition of investment securities
(
2,233
)
(
92,527
)
Proceeds from sale of investment securities
5,825
6,049
Net cash used in investing activities
(
180,148
)
(
142,336
)
Cash flows from financing activities:
Tax withholding on stock-based compensation
(
6,760
)
(
8,730
)
Proceeds from sale of treasury stock
462
210
Contributions from noncontrolling interests
2,977
1,472
Distributions to and redemptions of noncontrolling interests
(
3,510
)
(
4,364
)
Distributions to partners
(
128,457
)
(
124,249
)
Dividends paid to preferred unit holders
(
3,413
)
(
3,413
)
Proceeds from issuance of fixed rate unsecured notes, net of debt discount
—
398,468
Proceeds from unsecured credit facilities
280,000
132,419
Repayment of unsecured credit facilities
(
80,000
)
(
254,419
)
Proceeds from notes payable
10,000
—
Repayment of notes payable
(
32,787
)
(
7,597
)
Scheduled principal payments
(
2,548
)
(
3,183
)
Payment of financing costs
(
194
)
(
13,289
)
Net cash provided by financing activities
35,770
113,325
Net increase in cash and cash equivalents and restricted cash
16,653
138,747
Cash and cash equivalents and restricted cash at beginning of the period
61,884
91,354
Cash and cash equivalents and restricted cash at end of the period
$
78,537
230,101
11
Three months ended March 31,
2025
2024
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $
2,112
and $
1,656
in 2025 and 2024, respectively)
$
64,540
47,981
Cash paid for income taxes, net of refunds
$
—
6,070
Supplemental disclosure of non-cash transactions:
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid
$
131,020
126,807
Right of use assets obtained in exchange for new operating lease liabilities
$
—
829
Sale of leased asset in exchange for net investment in sales-type lease
$
—
703
Acquisition of operating real estate:
Tenant and other receivable and other assets
$
593
—
Acquired lease intangible assets
$
9,725
—
Notes payable assumed in acquisition, at fair value
$
40,060
—
Intangible liabilities, Accounts payable and other liabilities
$
18,957
—
Acquisition of unconsolidated real estate investments:
Tenant and other receivable and other assets
$
941
—
Acquired lease intangible assets
$
4,308
—
Notes payable assumed in acquisition, at fair value
$
16,749
—
Intangible liabilities, Accounts payable and other liabilities
$
1,119
—
Change in accrued capital expenditures
$
13,144
1,619
Stock-based compensation capitalized
$
583
434
The accompanying notes are an integral part of the consolidated financial statements.
12
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
1.
O
rganization and Significant Accounting Policies
General
Regency Centers Corporation (the "Parent Company") began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the "Operating Partnership"). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development, and redevelopment of shopping centers through the Operating Partnership and has no other assets other than through its investment in the Operating Partnership. Its only indebtedness consists of $
200
million of unsecured private placement notes, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
As of March 31, 2025, the Parent Company, the
Operating Partnership, and their controlled subsidiaries on a consolidated basis owned
381
properties and held partial interests in an additional
102
properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").
Basis of Presentation
The information included in this Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024
(the “Annual Report on Form 10-K”), as certain disclosures in this Report that would duplicate those included in such Annual Report on Form 10-K are not included in these consolidated financial statements. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.
Estimates, Risks and Uncertainties
The preparation of the Consolidated Financial Statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of commitments and contingent assets and liabilities, as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the net carrying values of its real estate investments, collectibility of lease income, and acquired lease intangible assets and liabilities. It is possible that the estimates and assumptions that have been utilized in the preparation of the Consolidated Financial Statements could change significantly if economic conditions were to change.
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent may be influenced by evolving political, economic, trade and immigration policies and macroeconomic uncertainties, and the success of the Company's tenants, in the aggregate, is important to the operating and financial success of the Company. These issues include, but are not limited to, the potential for impacts from tariffs and potential trade disputes, retaliatory actions by other countries, inflation, the cost and availability of
labor, including labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of capital. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, the Middle East conflicts and wars, and economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer confidence and spending.
The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, could result in adverse impacts on the U.S. economy, including inflation, redu
ction in consumer confidence and spending, a slowing of growth, and potentially a recession, thereby adversely impacting the costs to our tenants of operating their businesses, demand for their products and services, and their ability to pay rent, and/or decreasing future demand for space in shopping centers, which could adversely impact occupancy rates and rents. The potential impact of current macroeconomic and geopolitical challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties. See Item 1A of Part I of the Company's Annual Report on Form 10-K, as supplemented by the discussion in Item 1A of Part II of this Quarterly Report on Form 10-Q, for a more detailed discussion of the Risk Factors potentially impacting the Company's business and results of operations.
13
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Investment Risk Concentrations
As of March 31, 2025, no single tenant comprised 10% or more of our aggregate annualized base rent ("ABR")
.
As of March 31, 2025, the Company had three geographic concentrations that individually accounted for at least 10% of its aggregate ABR. Real estate properties located in California, Florida and the New York-Newark-Jersey City core-based statistical area accounted for
23.1
%
,
20.4
%
and
12.6
%
of ABR respectively. This geographic concentration makes those portions of the portfolio more susceptible
to adverse weather, natural disasters or economic events that may specifically and disproportionately impact these areas. None of the Regency's shopping centers are located outside the United States.
Consolidation
The Company consolidates properties that are wholly-owned and properties where it owns less than 100% but holds a controlling financial interest in the entity. Controlling financial interest is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.
Ownership of the Parent Company
The Parent Company currently has a single class of common stock and two series of preferred stock outstanding.
Ownership of the Operating Partnership
The Operating Partnership's capital includes Common Units and Preferred Units. As of March 31, 2025, the Parent Company owned approximately
99.4
%
of the outstanding Common Units, with the remaining limited partners' Common Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). The Parent Company currently owns all of the Preferred Units.
Real Estate Partnerships
As of March 31, 2025, Regency held partial ownership interests in
121
properties through real estate partnerships, of which
19
are consolidated. Regency's partners include institutional investors, real estate developers and/or operators, and passive investors (the "Partners" or "Limited Partners"). These partnerships have been established to own and operate real estate properties.
The Company’s involvement with these entities is through its ownership of its equity interest in the partnerships and management of the properties. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less, and they do not have substantive participating rights.
Regency has variable interests in these entities through its equity ownership, with Regency being the primary beneficiary in certain of these real estate partnerships. Regency consolidates the partnerships into its financial statements for which it is the primary beneficiary and reports the limited partners' interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not have a controlling financial interest, but has significant influence, Regency recognizes its equity investments in them in accordance with the equity method of accounting.
The assets of these partnerships are restricted to use by the respective partnerships and cannot be directly reached by general creditors of the Company. Similarly, the obligations of the partnerships are backed by, and can only be settled through the assets of these partnerships or by additional capital contributions by the partners, except to the extent that the Company has provided contractual payment guarantees.
14
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The carrying amounts of VIEs' assets and liabilities included in the Company's consolidated financial statements, exclusive of the Operating Partnership, are as follows:
(in thousands)
March 31, 2025
December 31, 2024
Assets
Real estate assets, net
$
451,333
312,873
Cash, cash equivalents and restricted cash
13,098
16,687
Tenant and other receivables, net
5,636
5,833
Deferred costs, net
6,022
3,178
Acquired lease intangible assets, net
15,119
6,293
Right of use assets, net
18,024
18,148
Other assets
1,035
597
Total Assets
$
510,267
363,609
Liabilities
Notes payable
$
73,268
32,653
Accounts payable and other liabilities
90,048
16,149
Acquired lease intangible liabilities, net
28,660
10,627
Tenants' security, escrow deposits and prepaid rent
1,376
1,260
Lease liabilities
19,416
19,370
Total Liabilities
$
212,768
80,059
Revenues, and Tenant and other Receivables
Income within Management, transaction, and other fees is primarily derived from contracts with the Company's investments in real estate partnerships.
The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts are as follows:
Three months ended March 31,
(in thousands)
Timing of satisfaction of performance obligations
2025
2024
Management, transaction, and other fees:
Property management services
Over time
$
4,110
3,961
Asset management services
Over time
1,717
1,602
Leasing services
Point in time
872
574
Other transaction fees
Point in time
113
259
Total management, transaction, and other fees
$
6,812
6,396
The accounts receivable for total management, transactions, and other fees, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are
$
18.0
million
and
$
19.7
million
, as of March 31, 2025 and December 31, 2024
, respectively.
Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements and the expected impact on our financial statements:
Standard
Description
Date of adoption
Effect on the financial statements or other significant matters
Recently
issued
:
ASU 2023-09
,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
ASU 2023-09 requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold.
January 1, 2025
T
he adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
15
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Standard
Description
Date of adoption
Effect on the financial statements or other significant matters
ASU 2024-03,
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
ASU 2024-03 requires public business entities to provide additional disclosures that disaggregate certain income statement expense captions into specified categories. The ASU does not impact the presentation of expenses on the face of the income statement but requires additional footnote disclosures to provide users of the financial statements with greater insight into the nature and composition of reported expenses.
January 1, 2027
The Company is assessing the impact this ASU will have on the Company’s financial statement disclosures. While the adoption of this standard is not expected to have a material impact on the financial position or results of operations, it will require enhanced footnote disclosures related to the disaggregation of income statement expenses.
ASU 2024-04,
Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
ASU 2024-04 clarifies guidance on the accounting for inducements offered to holders of convertible debt instruments to encourage them to convert the debt into equity securities. Specifically, the ASU clarifies the recognition and measurement of inducement costs and their impact on the issuer’s financial statements.
January 1, 2026
The Company is assessing the impact this ASU will have on the Company’s financial statement disclosures. The adoption is not expected to have a material impact on the financial position or results of operations, as the Company currently does not have any convertible debt instruments in our financing arrangements.
2.
Real Estate Investments
The following tables detail the properties acquired for the periods set forth below:
(in thousands)
Three months ended March 31, 2025
Date Purchased
Property Name
City/State
Property
Type
Regency's Ownership
Purchase
Price
(1)
Debt
Assumed,
Net of
Discounts
(1)
Intangible
Assets
(1)
Intangible
Liabilities
(1)
1/1/2025
Putnam Plaza
(2)
Carmel Hamlet, NY
Operating
100
%
$
31,000
16,749
4,308
460
1/10/2025
Orange Meadows
Orange, CT
Outparcel
100
%
4,200
—
354
299
3/14/2025
Brentwood Place
Nashville, TN
Operating
100
%
118,500
40,060
9,371
18,295
Total property acquisitions
$
153,700
56,809
14,033
19,054
(in thousands)
Three months ended March 31, 2024
Date Purchased
Property Name
City/State
Property
Type
Regency's Ownership
Purchase
Price
(1)
Debt
Assumed,
Net of
Discounts
(1)
Intangible
Assets
(1)
Intangible
Liabilities
(1)
2/23/2024
The Shops at Stone Bridge
Cheshire, CT
Development
100
%
$
8,000
—
—
—
Total property acquisitions
$
8,000
—
—
—
(1)
Amounts for purchase price and allocation are reflected at
100
%.
(2)
This property was held within a single property unconsolidated real estate partnership, in which the Company held a
66.7
% ownership interest. Effective January 1, 2025, the Company purchased our partner's remaining
33.3
% ownership interest.
16
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
3.
Property Dispositions and Assets Held for Sale
There were
no
property dispositions during the three months ended March 31, 2025.
The following table provides a summary of consolidated shopping centers and land parcels sold during the comparative period:
Three months ended March 31,
(in thousands, except number sold data)
2024
Net proceeds from sale of real estate investments
$
30,033
Gain on sale of real estate, net of tax
11,403
Number of operating properties sold
1
Percent interest sold
100
%
As of March 31, 2025
the Company had
one
operating property and
one
land parcel classified as held for sale. There were no liabilities associated with these properties. As of
December 31, 2024
the Company did
no
t have any of its properties classified as held for sale.
The following table presents the assets associated with the properties classified as held for sale as of March 31, 2025:
(in thousands)
March 31, 2025
Land and improvements
$
12,345
Buildings and improvements
4,858
Less: accumulated depreciation
(
983
)
Assets associated with real estate assets held for sale
$
16,220
4.
Other Assets
The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the periods set forth below:
(in thousands)
March 31, 2025
December 31, 2024
Goodwill
$
166,739
166,739
Investments
46,754
51,820
Prepaid and other
58,864
40,240
Derivative assets
10,204
12,781
Furniture, fixtures, and equipment, net ("FF&E")
8,395
7,954
Deferred financing costs, net
8,761
9,512
Total other assets
$
299,717
289,046
17
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
5.
Notes Payable and Unsecured Credit Facilities
The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:
(in thousands)
Scheduled Maturity Date
Weighted
Average
Contractual
Rate
Weighted
Average
Effective
Rate
March 31, 2025
December 31, 2024
Notes payable:
Fixed rate mortgage loans
11/5/2025
-
6/1/2037
3.9
%
4.4
%
$
367,648
337,703
Variable rate mortgage loans
(1)
10/1/2026
-
2/20/2032
4.5
%
4.6
%
283,496
282,117
Fixed rate unsecured debt
11/1/2025
-
3/15/2049
4.1
%
4.2
%
3,725,096
3,723,880
Total notes payable, net
4,376,240
4,343,700
Unsecured credit facility:
$
1.5
Billion Line of Credit
(the "Line")
(2)
3/23/2028
5.2
%
5.5
%
265,000
65,000
Total unsecured credit facility
265,000
65,000
Total debt outstanding
$
4,641,240
4,408,700
(1)
As of
March 31, 2025,
96.1
%
of the variable rate mortgage loans are fixed through interest rate swaps.
(2)
The Company has the option to extend the maturity date by
two additional six-month periods
. Weighted average effective rate for the Line is calculated based on a fully drawn Line balance using the period end variable rate.
Scheduled principal payments and maturities on notes payable and the unsecured credit facility were as follows:
(in thousands)
March 31, 2025
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
Mortgage
Loan
Maturities
Unsecured
Maturities
(1)
Total
2025
(2)
$
7,635
16,000
250,000
273,635
2026
10,445
147,848
200,000
358,293
2027
7,558
226,308
525,000
758,866
2028
5,734
57,374
565,000
628,108
2029
2,786
97,120
425,000
524,906
Beyond 5 Years
5,170
78,466
2,050,000
2,133,636
Unamortized debt premium/(discount) and issuance costs
—
(
11,300
)
(
24,904
)
(
36,204
)
Total
$
39,328
611,816
3,990,096
4,641,240
(1)
Includes unsecured public and private debt and unsecured credit facilities.
(2)
Reflects scheduled principal payments and maturities for the remainder of the year.
The Company was in compliance as of March 31, 2025
, with all debt covenants.
6.
Derivative Instruments
The Company may use derivative financial instruments, including interest swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The Company does not intend to utilize derivative instruments for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties that have high credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
18
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Detail on the Company's interest rate derivatives outstanding as of
March 31, 2025 and December 31, 2024 is as follows:
(in thousands, except number of instruments data)
Interest Rate Swaps
March 31, 2025
December 31, 2024
Notional amount
$
303,116
301,444
Number of instruments
15
14
Detail on the fair value of the Company's interest rate derivatives as of
March 31, 2025 and December 31, 2024 is as follows:
(in thousands)
Interest rate swaps classified as:
March 31, 2025
December 31, 2024
Derivative assets
$
10,204
12,781
Derivative liabilities
(
1,352
)
(
423
)
Derivatives in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities.
These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not enter into derivative instruments for trading or speculative purposes. As of March 31, 2025, all of the Company's derivatives are designated as cash flow hedges.
The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Accumulated other comprehensive income ("AOCI") and subsequently reclassified into earnings in the period that the hedged interest payments affects earnings.
The following table represents the effect of the derivative financial instruments on the accompanying Consolidated Financial Statements:
Location and Amount of (Loss) Gain Recognized in OCI on Derivative
Location and Amount of Gain Reclassified from AOCI into Net Income
Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
Three months ended March 31,
Three months ended March 31,
Three months ended March 31,
(in thousands)
2025
2024
2025
2024
2025
2024
Interest rate swaps
$
(
2,648
)
8,593
I
nterest expense, ne
t
$
(
1,745
)
(
2,367
)
Interest expense, net
$
48,013
42,868
As of March 31, 2025, the Company expects approximately
$
1.7
million
of accumulated comprehensive income on derivative instruments, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months.
7.
Leases
Substantially all of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per lease contracts, which are primarily related to base rent, and in some cases stated amounts for common area maintenance ("CAM"), real estate taxes, and insurance (collectively, "Recoverable Costs"). Income for these amounts is recognized on a straight-line basis.
Variable lease income includes the following two main items in the lease contracts:
•
Recoveries from tenants represent the tenants' contractual obligations to reimburse the Company for their portion of Recoverable Costs incurred. Generally, the Company's leases provide for the tenants to reimburse the Company based on the tenants' share of the actual costs incurred in proportion to the tenants' share of leased space in the property.
•
Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.
19
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in Topic 842:
(in thousands)
Three months ended March 31,
2025
2024
Operating lease income
Fixed and in-substance fixed lease income
$
266,737
256,626
Variable lease income
98,378
92,290
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization, net
6,750
5,823
Uncollectible straight-line rent
(1)
(
400
)
(
400
)
Uncollectible amounts billable in lease loss
(
386
)
(
1,233
)
Total lease income
$
371,079
353,106
(1)
The amounts include straight-line rent adjustments associated with converting between cash basis and accrual basis of accounting for certain leases.
The following table represents the components of Tenant and other receivables, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:
(in thousands)
March 31, 2025
December 31, 2024
Tenant receivables
$
26,094
35,306
Straight-line rent receivables
162,885
157,507
Other receivables
(1)
61,231
62,682
Total tenant and other receivables
$
250,210
255,495
(1)
Other receivables include notes receivable, construction receivables, insurance receivables, and amounts due from real estate partnerships for Management, transaction, and other fee income.
8.
Fair Value Measurements
(a) Disclosure of Fair Value of Financial Instruments
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except those instruments listed below:
March 31, 2025
December 31, 2024
(in thousands)
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
Financial assets:
Notes receivable
$
31,702
31,728
$
31,790
31,755
Financial liabilities:
Notes payable, net
$
4,376,240
4,213,402
$
4,343,700
4,141,096
Unsecured credit facilities
(1)
$
265,000
265,000
$
65,000
65,000
(1)
The carrying amounts approximated its fair values due to the variable nature of the terms.
The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of March 31, 2025, and December 31, 2024, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.
The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.
20
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
(b) Fair Value Measurements
The following financial instruments are measured at fair value on a recurring basis:
Securities
The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment loss (income) in the accompanying Consolidated Statements of Operations, and include unrealized losses of
$
2.4
million
and unrealized gains of
$
2.4
million
during the three months ended March 31, 2025 and 2024, respectively.
Available-for-Sale Debt Securities
Available-for-sale debt securities consist of investments in corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.
Interest Rate Derivatives
The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.
The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:
Fair Value Measurements as of March 31, 2025
Quoted Prices in Active Markets for Identical Assets
Significant Other Observable Inputs
Significant Unobservable Inputs
(in thousands)
Balance
(Level 1)
(Level 2)
(Level 3)
Assets:
Securities
$
34,563
34,563
—
—
Available-for-sale debt securities
12,191
—
12,191
—
Interest rate derivatives
10,204
—
10,204
—
Total
$
56,958
34,563
22,395
—
Liabilities:
Interest rate derivatives
$
(
1,352
)
—
(
1,352
)
—
21
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Fair Value Measurements as of December 31, 2024
Quoted Prices in Active Markets for Identical Assets
Significant Other Observable Inputs
Significant Unobservable Inputs
(in thousands)
Balance
(Level 1)
(Level 2)
(Level 3)
Assets:
Securities
$
39,419
39,419
—
—
Available-for-sale debt securities
12,401
—
12,401
—
Interest rate derivatives
12,781
—
12,781
—
Total
$
64,601
39,419
25,182
—
Liabilities:
Interest rate derivatives
$
(
423
)
—
(
423
)
—
9.
Equity and Capital
Preferred Stock of the Parent Company
Terms and conditions of the preferred stock outstanding are summarized as follows:
Preferred Stock Outstanding as of March 31, 2025 and December 31, 2024
Date of Issuance
Shares Issued and Outstanding
Liquidation Preference
Distribution Rate
Callable By Company
Series A
8/18/2023
4,600,000
$
115,000,000
6.250
%
On demand
Series B
8/18/2023
4,400,000
110,000,000
5.875
%
On demand
9,000,000
$
225,000,000
Each series of Preferred Stock is non-voting, has no stated maturity and is redeemable for cash at $
25.00
per share at the Company's option. The holders of the Preferred Stock have general preference rights over common stockholders with respect to liquidation and quarterly distributions. Except under certain limited conditions, holders of the Preferred Stock will not be entitled to vote. In the event of a cumulative arrearage equal to six quarterly dividends, holders of the Preferred Stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Preferred Stock will have the right to convert all or part of the shares of the Preferred Stock held by such holders on the applicable conversion date into a number of shares of common stock.
Common Stock of the Parent Company
At the Market ("ATM") Program
Under the Parent Company's ATM Program, as authorized by the Board,
the Parent Company may sell up to $
500
million of common stock at prices determined by the market at the time of sale.
The timing of sales, if any, will be dependent on market conditions and other factors.
During 2024, the Company entered into forward sale agreements under its ATM program through which the Parent Company is obligated to issue
1,339,377
shares of its common stock at a weighted average offering price of $
74.66
per share before any underwriting discount and offering expenses. The shares under the forward sales agreements must be settled within
one year
of their trade dates, which vary by agreement, and range from November 26, 2025, to December 5, 2025. Upon settlement, subject to certain exceptions, the Company may elect, in its sole discretion, to physically settle, cash settle, or net share settle all or any portion of our obligations under any forward sale agreement.
No
shares to be issued under the 2024 forward sales agreements have been settled as of
March 31, 2025
. Proceeds from the issuance of shares are expected to be approximately $
100.0
million before any underwriting discount and offering expenses and are expected to be used to fund acquisitions of operating properties, fund developments and redevelopments, and for general corporate purposes.
As of March 31, 2025
, and after giving effect to the aforementioned forward equity offering, $
400
million of common stock remained available for issuance under this ATM Program.
22
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Stock Repurchase Program
On July 31, 2024, the Board authorized a common stock repurchase program under which the Company may purchase up to a maximum of $
250
million of its outstanding common stock through open market transactions, and/or in privately negotiated transactions (referred to as the "Repurchase Program"). The timing and price of stock repurchases, if any, are dependent upon market conditions and other factors. The stock repurchased, if not retired, is treated as treasury stock. The Board's authorization for the Repurchase Program expires on
June 30, 2026
, unless modified, extended or earlier terminated by the Board in its discretion.
During the three months ended March 31, 2025
, the Company made
no
repurchases
and
$
250
million
remained available under the Repurchase Program.
Preferred Units of the Operating Partnership
The number of Series A Preferred Units and Series B Preferred Units, respectively, issued by the Operating Partnership is equal to the number of Series A Preferred Stock and Series B Preferred Stock, respectively, issued by the Parent Company.
Common Units of the Operating Partnership
Common Units are issued, or redeemed and retired, for each share of the Parent Company stock issued or redeemed, or retired, as described above.
10.
Stock-Based Compensation
The Company granted
305,041
shares of restricted stock with a weighted-average grant-date fair value of
$
77.61
per share and
322,159
shares of restricted stock with a weighted-average grant-date fair value of $
60.31
per share during the
three months ended March 31, 2025 and the three months ended March 31, 2024
, respectively.
The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recognizes forfeitures as they occur.
Three months ended March 31,
(in thousands)
2025
2024
Restricted stock
(1)
$
5,443
4,640
Directors' fees paid in common stock and other employee stock grants
105
152
Capitalized stock-based compensation
(
583
)
(
434
)
Stock-based compensation, net of capitalization
$
4,965
4,358
(1)
In addition, during the
three months ended March 31, 2024, the Company expensed
$
1.9
million
within Other operating expenses in connection with vesting of restricted stock units related to the 2023 acquisition of UBP.
11.
Earnings per Share and Unit
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per shar
e:
Three months ended March 31,
(in thousands, except per share data)
2025
2024
Numerator:
Net income attributable to common shareholders - basic
$
106,174
106,361
Net income attributable to common shareholders - diluted
$
106,174
106,361
Denominator:
Weighted average common shares outstanding for basic EPS
181,449
184,678
Weighted average common shares outstanding for diluted EPS
(1)
181,813
184,770
Net income per common share – basic
$
0.59
0.58
Net income per common share – diluted
$
0.58
0.58
(1)
Includes the dilutive impact of unvested restricted stock.
23
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The effect of the assumed exchange of the EOP units and certain other exchangeable units had an anti-dilutive effect upon the calculation of net income attributable to the common shareholders per share. Accordingly, the impact of such assumed exchanges has not been included in the determination of diluted net income per share calculations. Weighted average EOP units outstanding were
1,096,659
and
1,101,104
for the three months ended March 31, 2025 and 2024, respectively.
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per uni
t ("EPU"):
Three months ended March 31,
(in thousands, except per unit data)
2025
2024
Numerator:
Net income attributable to common unit holders - basic
$
106,816
107,003
Net income attributable to common unit holders - diluted
$
106,816
107,003
Denominator:
Weighted average common units outstanding for basic EPU
182,546
185,779
Weighted average common units outstanding for diluted EPU
(1)
182,910
185,872
Net income per common unit – basic
$
0.59
0.58
Net income per common unit – diluted
$
0.58
0.58
(1)
Includes the dilutive impact of unvested restricted stock.
The effect of the assumed exchange of certain other exchangeable units had an anti-dilutive effect upon the calculation of net income attributable to the common unit holders per share. Accordingly, the impact of such assumed exchanges has not been included in the determination of diluted net income per unit calculations.
12.
Segment Information
The Company's portfolio is located throughout the United States. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital.
The Company’s chief operating decision maker ("CODM") evaluates operating and financial performance for each property on an individual property level; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into
one
reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance.
The following tables provide information about the Company's reportable segment's revenues, significant expenses, NOI and the reconciliation of NOI to the Company’s consolidated Net income:
Three months ended March 31,
2025
2024
Lease income
$
408,088
386,349
Other property income
3,379
4,594
Less:
Straight-line rent on lease income
(
6,451
)
(
5,511
)
Above/below market rent amortization, net
(
7,005
)
(
6,012
)
Total real estate revenues
398,011
379,420
Operating expenses
(1)
(
73,464
)
(
68,072
)
Real estate taxes
(
51,009
)
(
48,410
)
NOI
$
273,538
262,938
(1)
Operating expenses include Operating and maintenance, Ground rent and Termination expense
24
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Three months ended March 31,
2025
2024
Reconciliation of NOI to Net income:
NOI
$
273,538
262,938
Consolidated:
Straight-line rent on lease income
5,607
5,594
Above/below market rent amortization, net
6,750
5,823
Management, transaction, and other fees
6,812
6,396
Straight-line rent on ground rent
(
337
)
(
341
)
Above/below market ground rent amortization
(
535
)
(
535
)
Depreciation and amortization
(
96,774
)
(
97,585
)
General and administrative
(
21,600
)
(
26,132
)
Other operating expenses
(
1,688
)
(
2,643
)
Other expense, net
(
48,673
)
(
29,214
)
Add: Share of noncontrolling interests excluded from NOI
2,204
2,046
Less: Equity in income of investments in real estate excluded from NOI
(
13,451
)
(
13,689
)
Net income
$
111,853
112,658
13.
Commitments and Contingencies
Litigation
The Company is a party to litigation and other disputes that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.
Environmental
The Company is subject to numerous environmental laws and regulations. With respect to applicability to the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, underground petroleum storage tanks and other historic land uses. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that existing environmental studies with respect to its shopping centers have revealed all potential environmental contamination; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.
The Company had accrued liabilities of
$
17.1
million and
$
17.3
million
for environmental remediation, which are
i
ncluded in
Accounts payable, and other liabilities
on the Company’s Consolidated Balance Sheets as of
March 31, 2025 and December 31, 2024, respectively.
Letters of Credit
The Company has the right to issue letters of credit under the Line up to an aggregate amount not to exceed $
50.0
million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance subsidiary and to facilitate the construction of development projects. The Comp
any had
$
10.9
million
in letters of credit outstanding as of both March 31, 2025 and December 31, 2024
.
25
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risk factors, including, without limitation, risk factors relating to:
•
the current economic and geopolitical environments
•
pandemics or other health crises
•
operating retail-based shopping centers
•
real estate investments
•
the environment affecting our properties
•
corporate matters
•
our partnerships and joint ventures
•
funding strategies and capital structure
•
information management and technology
•
taxes and the Parent Company’s qualification as a REIT
•
the Company’s stock price
As more specifically described in Part I, Item 1A. “Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K") and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2024 Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other filings with and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events or developments or otherwise, except as and to the extent required by law.
Non-GAAP Financial Measures
In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP financial measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP financial measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP
26
measures are provided. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.
Our non-GAAP financial measures include the following:
•
Adjusted Funds From Operations ("AFFO")
is an additional performance measure we use that reflects cash available to fund the Company’s business needs and distribution to shareholders. AFFO is calculated by adjusting Core Operating Earnings ("COE") for (i) capital expenditures necessary to maintain and lease our portfolio of properties, (ii) debt cost and derivative adjustments and (iii) stock-based compensation.
•
Core Operating Earnings
is an additional performance measure we use because the computation of Nareit Funds from Operations ("
Nareit FFO
") includes certain non-comparable items that affect our period-over-period performance. Core Operating Earnings excludes from Nareit FFO: (i) transaction related income or expenses, (ii) gains or losses from the early extinguishment of debt, (iii) certain non-cash components of earnings derived from straight-line rents, above and below market rent amortization, and debt and derivative mark-to-market amortization, and (iv) other amounts as they occur.
•
Nareit Funds from Operations ("Nareit FFO")
is a commonly used measure of REIT performance, which Nareit defines as net income, computed in accordance with GAAP, excluding gains on sales and impairments of real estate, net of tax, plus depreciation and amortization, and after adjustments for unconsolidated real estate investment partnerships and joint ventures. We compute Nareit FFO for all periods presented in accordance with Nareit's definition.
Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations.
•
Net Operating Income ("NOI")
is the sum of base rent, percentage rent, termination fee income, tenant recoveries, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, termination expense, and uncollectible lease income. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement amortization, and other fees. We also provide disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.
Management believes that NOI is a useful measure for investors because it provides insight into the core operations and performance of our properties, independent of the capital structure, financing activities, and non-operating factors. By focusing on property-level performance, NOI allows investors to compare the performance of our real estate assets across periods and with those of other REIT peers in the industry, facilitating a clearer understanding of trends in occupancy, rental income, and operating expense management. In addition to its relevance for investors, management uses NOI as a key performance metric in making operational and strategic decisions. NOI is used to evaluate income generated from shopping centers (i.e., return on assets) and to guide decisions on capital investments. These decisions may include acquisitions, redevelopments, and investments in capital improvements.
•
Pro-rata
information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.
We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate investment partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP financial measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.
The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated real estate partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.
27
The presentation of Pro-rata information has limitations which include, but are not limited to, the following:
o
The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
o
Other companies in our industry may calculate their Pro-rata interest differently, limiting the comparability of Pro-rata information.
Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.
•
Pro-rata
Same Property NOI
is a key non-GAAP financial measure commonly used by REITs to evaluate operating performance. It is calculated on a proportionate ownership basis for properties held during the comparable reporting periods, excluding revenue and expenses related to non-same properties during the periods.
Management believes this measure provides investors with a useful and consistent comparison of the Company’s operating performance and trends. Management uses Pro-rata Same Property NOI as a supplemental measure to assess property-level performance, excluding the effects of corporate-level expenses, financing costs, and non-operating activities. This measure allows investors to evaluate trends in revenue and expense growth for properties that have been consistently operated during the periods.
Other Defined Terms
The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results, and are included in this document:
•
Anchor Space
is a space equal to or greater than 10,000 SF.
•
Development Completion
is a Property in Development that is deemed complete upon the earlier of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the property features at least two years of anchor operations. Once deemed complete, the property is termed a Retail Operating Property.
•
A
Non-Same Property
is any property, during either calendar year period being compared, that was acquired, sold, a Property in Development, a Development Completion, or a property under, or being positioned for, significant redevelopment that distorts comparability between periods. Non-retail properties and corporate activities, including the captive insurance program, are part of Non-Same Property.
•
Property In Development
includes properties in various stages of ground-up development.
•
Property In Redevelopment
includes Retail Operating Properties under redevelopment or being positioned for redevelopment. Unless otherwise indicated, a Property in Redevelopment is included in the Same Property pool.
•
Redevelopment Completion
is a Property in Redevelopment that is deemed complete upon the earlier of: (i) 90% of total estimated project costs have been incurred and percent leased equals or exceeds 95% for the Company owned GLA related to the project, or (ii) the property features at least two years of anchor operations, if applicable.
•
Retail Operating Property
is any retail property not termed a Property in Development. A retail property is any property where the majority of the income is generated from retail uses.
•
Same Property
is a Retail Operating Property that was owned and operated for the entirety of both calendar year periods being compared. This term excludes Properties in Development, prior year Development Completions, and Non-Same Properties. Properties in Redevelopment are included unless otherwise indicated.
•
Shop Space
is a space under 10,000 SF.
Overview of Our Strategy
Regency Centers Corporation began operations as a publicly-traded REIT in 1993. All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our real estate partnerships. As of March 31, 2025, the Parent Company owned approximately 99.4% of the outstanding Common Units and 100% of the Preferred Units of the Operating Partnership.
28
We are a preeminent national owner, operator, and developer of neighborhood and community shopping centers predominantly located in suburban trade areas with compelling demographics. As of March 31, 2025, we had full or partial ownership interests in 483 retail properties. Our properties are high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban markets within the country's most desirable metro areas, and contain approximately 57.7 million square feet ("SF") of gross leasable area ("GLA").
Our mission is to create thriving environments for retailers and service providers to connect with surrounding neighborhoods and communities. Our vision is to elevate quality of life as an integral thread in the fabric of our communities. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect with their neighborhoods, communities, and customers.
Our values:
•
We are our people: Our people are our greatest asset, and we believe that our highly skilled and talented team makes us better.
•
We do what is right: We act with unwavering standards of honesty and integrity.
•
We connect with our communities: We promote philanthropic ideas and strive for the betterment of our neighborhoods by giving our time and financial support.
•
We are responsible: Our duty is to balance purpose and profit, being good stewards of capital and the environment for the benefit of all our stakeholders.
•
We strive for excellence: When we are passionate about what we do, it is reflected in our performance.
•
We are better together: When we listen to each other and our customers, we will succeed together.
Our goals are to:
•
Own and manage a portfolio of high-quality neighborhood and community shopping centers anchored primarily by market leading grocers and principally located in suburban trade areas in the most desirable metro areas in the United States. We believe that this strategy will result in highly desirable and attractive centers with best-in-class retailers. These centers should command higher rental and occupancy rates resulting in excellent prospects to grow NOI;
•
Create shareholder value by increasing earnings and dividends per share that generate total returns at or near the top of our shopping center peers;
•
Maintain an industry leading, disciplined development and redevelopment platform to create exceptional retail centers that deliver favorable returns;
•
Support our business activities with a conservative capital structure, including a strong balance sheet with sufficient liquidity to meet our capital needs together with a carefully constructed debt maturity profile; and
•
Implement sustainability and governance practices through our Corporate Responsibility program to support and enhance our business goals and objectives.
Executing on our Strategy
During the three months ended March 31, 2025, we had Net income attributable to common shareholders of $106.2 million as compared to $106.4 million during the three months ended March 31, 2024.
During the three months ended March 31, 2025:
•
Our Pro-rata same property NOI, excluding termination fees, grew 4.3%, as compared to the three months ended March 31, 2024, primarily attributable to improvements in base rent from increases in year over year occupancy rates, contractual rent steps in existing leases, and positive rent spreads on comparable new and renewal leases.
•
We executed 450 new and renewal leasing transactions representing 1.4 million Pro-rata SF with positive rent spreads of 8.1% during the three months ended March 31, 2025, compared to 461 leasing transactions representing 2.0 million Pro-rata SF with positive rent spreads of 8.5% during the three months ended March 31, 2024. Rent spreads are calculated on all executed leasing transactions for comparable Retail Operating Property spaces, including spaces vacant greater than 12 months.
•
At March 31, 2025, December 31, 2024, and March 31, 2024 our total property portfolio was 96.3%, 96.3%, and 95.0% leased, respectively. At March 31, 2025, December 31, 2024, and March 31, 2024 our same property portfolio was 96.5%, 96.5%, and 95.5% leased, respectively.
29
We continued our development and redevelopment of high quality shopping centers:
•
Estimated Pro-rata project costs of our current in process development and redevelopment projects totaled $498.5 million at March 31, 2025, compared to $497.3 million at December 31, 2024.
•
Development and redevelopment projects completed during the three months ended March 31, 2025 represented $5.3 million of estimated net project costs, with an average stabilized yield of 52.5%. A stabilized yield for development and redevelopment projects represents the incremental NOI (estimated stabilized NOI less NOI prior to project commencement) divided by the total project costs.
We maintained liquidity and the financial flexibility to cost effectively fund investment opportunities and debt maturities:
•
In February 2025, we received a credit rating upgrade to A- with a stable outlook from S&P Global Ratings.
•
We have $430.3 million of loans maturing during the next 12 months, including Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay-off as they mature.
•
At March 31, 2025, we had $1.22 billion available on the Line, which expires on March 23, 2028 unless we exercise the available options to extend the expiration for two additional six-month periods, in which case the term will be extended in accordance with any such option exercise.
Economic Conditions
Refer to the Estimated Risks and Uncertainties section in Note 1 — Organization and Significant Accounting Policies, as these risks and uncertainties could have a material impact on future results of operations and trends.
Property Portfolio
The following table summarizes general information related to the consolidated properties in our portfolio:
(GLA in thousands)
March 31, 2025
December 31, 2024
Number of Properties
381
379
GLA
44,405
43,876
% Leased – Operating and Development
96.2
%
96.2
%
% Leased – Operating
96.4
%
96.5
%
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions.
$25.81
$25.56
The following table summarizes general information related to the unconsolidated properties owned in real estate investment partnerships in our portfolio:
(GLA in thousands)
March 31, 2025
December 31, 2024
Number of Properties
102
103
GLA
13,249
13,439
% Leased – Operating and Development
97.0
%
96.8
%
% Leased –Operating
97.1
%
96.8
%
Weighted average annual effective rent PSF, net of tenant concessions
$24.82
$24.51
The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:
March 31, 2025
December 31, 2024
Percent Leased – All Properties
96.3
%
96.3
%
Anchor Space (spaces
≥
10,000 SF)
98.3
%
98.4
%
Shop Space (spaces < 10,000 SF)
93.1
%
93.0
%
30
The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our real estate partnerships (totals as a weighted average PSF):
Three months ended March 31, 2025
Leasing
Transactions
SF (in
thousands)
Base Rent
PSF
Tenant
Allowance
and Landlord
Work PSF
Leasing
Commissions
PSF
Anchor Space Leases
New
4
85
$
19.82
$
75.50
$
4.98
Renewal
20
557
13.80
0.23
0.15
Total Anchor Space Leases
24
642
$
14.60
$
10.16
$
0.79
Shop Space Leases
New
119
227
$
41.94
$
47.82
$
17.01
Renewal
307
541
40.58
1.41
1.39
Total Shop Space Leases
426
768
$
40.98
$
15.12
$
6.01
Total Leases
450
1,410
$
28.97
$
12.86
$
3.63
Three months ended March 31, 2024
Leasing
Transactions
SF (in
thousands)
Base Rent
PSF
Tenant
Allowance
and Landlord
Work PSF
Leasing
Commissions
PSF
Anchor Space Leases
New
11
241
$
21.59
$
52.82
$
8.10
Renewal
29
851
21.00
0.29
0.05
Total Anchor Space Leases
40
1,092
$
21.13
$
11.91
$
1.83
Shop Space Leases
New
136
286
$
37.65
$
38.66
$
13.10
Renewal
285
573
37.27
3.66
0.61
Total Shop Space Leases
421
859
$
37.40
$
15.33
$
4.77
Total Leases
461
1,951
$
28.29
$
13.41
$
3.13
The weighted-average base rent PSF on signed Shop Space leases during 2025 was $40.98 PSF, which is higher than the weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months of $36.13 PSF. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 8.1% for the three months ended March 31, 2025, compared to 8.5% for the three months ended March 31, 2024.
Diversification and Concentration of Tenant Risk
We seek to reduce our risk by limiting dependence on any single tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:
March 31, 2025
Tenant
Number of
Stores
Percentage of
Company-
owned GLA
(1)
Percentage of
Annual Base Rent
(1)
Publix
67
5.9%
2.8%
Albertsons Companies, Inc.
52
4.2%
2.8%
TJX Companies, Inc.
75
3.7%
2.8%
Amazon/Whole Foods
39
2.6%
2.6%
Kroger Co.
52
6.0%
2.6%
(1)
Includes Regency's Pro-rata share of unconsolidated properties and excludes those owned by anchors.
31
Bankruptcies and Credit Concerns
Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate potentially adverse impacts through maintaining a high quality portfolio, diversifying our geographic and tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and investing in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income.
We recognize that current economic conditions including, but not limited to, the potential impacts of tariffs and trade deals, inflation, cost and availability of labor, including potential labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of credit have introduced additional macroeconomic uncertainty. These economic conditions could place further financial strain on retailers by raising costs and compressing margins. The potential for a recession and the severity and duration of any economic downturn could negatively impact our existing tenants and their ability to continue to meet their lease obligations.
Although base rent is derived from long-term lease contracts, tenants that file for bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, in a tenant bankruptcy situation it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. In the event that a tenant with a significant number of leases in our shopping centers files for bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. At March 31, 2025, the tenants who are currently in bankruptcy and which continue to occupy space in our shopping centers represent an aggregate of 0.9% of our Pro-rata annual base rent with no single tenant exceeding 0.5% of Pro-rata annual base rent.
Results of Operations
Comparison of the three months ended March 31, 2025 and 2024:
Changes in revenues are summarized in the following table:
Three months ended March 31,
(in thousands)
2025
2024
Change
Lease income
Base rent
$
254,556
244,135
10,421
Recoveries from tenants
91,481
85,023
6,458
Percentage rent
6,658
7,807
(1,149
)
Uncollectible lease income
(386
)
(1,233
)
847
Other lease income
6,413
5,957
456
Straight-line rent
5,607
5,594
13
Above / below market rent amortization, net
6,750
5,823
927
Total lease income
$
371,079
353,106
17,973
Other property income
3,021
4,350
(1,329
)
Management, transaction, and other fees
6,812
6,396
416
Total revenues
$
380,912
363,852
17,060
Lease income increased by $18.0 million primarily due to the following:
•
$10.4 million increase in Base rent, mainly driven by the following:
o
$9.7 million increase resulting from same properties, including:
▪
$7.4 million increase due to increases from occupancy, rent steps in existing leases, and positive rental spreads on new and renewal leases; and
▪
$2.3 million increase due to redevelopment projects that commenced operations;
o
$1.1 million increase from acquisitions of operating properties in 2025 as compared to 2024 activity; and
o
$0.9 million increase from rent commencements at completed development properties; partially offset by
o
$1.3 million decrease due to dispositions of operating properties.
32
•
$6.5 million increase from contractual Recoveries from tenants which represents their proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, mainly from the following:
o
$5.9 million increase primarily due to higher operating costs and increased occupancy in the current year; and
o
$0.8 million increase driven by the acquisition of operating properties in 2025 as compared to 2024, and rent commencements at development properties; partially offset by
o
$0.2 million decrease due to disposition of operating properties.
•
$1.1 million decrease in Percentage rent due to fluctuations in tenant sales.
Other property income decreased by $1.3 million primarily due to business interruption insurance proceeds received in the comparative period.
There were no significant changes in Management, transaction, and other fees.
Changes in our operating expenses are summarized in the following table
:
Three months ended March 31,
(in thousands)
2025
2024
Change
Depreciation and amortization
$
96,774
97,585
(811
)
Property operating expense
68,459
63,274
5,185
Real estate taxes
46,360
44,307
2,053
General and administrative
21,600
26,132
(4,532
)
Other operating expenses
1,688
2,643
(955
)
Total operating expenses
$
234,881
233,941
940
There were no significant changes in Depreciation and amortization.
Property operating expense increased by $5.2 million, mainly due to the following:
•
$3.6 million increase from same properties primarily attributable to higher recoverable common area maintenance and other tenant-related costs; and
•
$1.1 million increase is attributable to property damage losses resulting from a variety of events.
Real estate taxes increased by $2.1 million, mainly due to increases in real estate tax assessments across the same property portfolio.
General and administrative costs decreased by $4.5 million mainly due to the following:
•
$2.6 million decrease due to changes in the fair value of participant obligations within the deferred compensation plan, which were attributable to changes in the fair values of those investments recognized in Net investment loss (income); and
•
$2.0 million change in overhead capitalization driven by variability in the number, timing and progress of our development and redevelopment projects.
There were no significant changes in Other operating expenses.
Changes in Other expense, net are summarized in the following table:
Three months ended March 31,
(in thousands)
2025
2024
Change
Interest expense, net
Interest on notes payable
$
48,330
45,601
2,729
Interest on unsecured credit facilities
2,913
1,439
1,474
Capitalized interest
(2,112
)
(1,656
)
(456
)
Hedge expense
226
109
117
Interest income
(1,344
)
(2,625
)
1,281
Interest expense, net
$
48,013
42,868
5,145
Gain on sale of real estate, net of tax
(101
)
(11,403
)
11,302
Loss on early extinguishment of debt
—
180
(180
)
Net investment loss (income)
761
(2,431
)
3,192
Total other expense, net
$
48,673
29,214
19,459
33
Interest expense, net increased by $5.1 million primarily due to the following:
•
$2.7 million increase in Interest on notes payable is primarily due to new net public debt issuances totaling $475.0 million in 2024; and
•
$1.5 million increase in Interest on unsecured credit facilities is primarily due to a higher weighted average outstanding balance under our Line coupled with incrementally higher weighted average contractual interest rates; partially offset by
•
$1.3 million decrease in interest income primarily due to maintaining higher levels of excess cash in short term investments in the comparative prior period.
During the three months ended March 31, 2024, we recognized gains on sale of $11.4 million mainly from sale of one operating property and recognition of one sales-type lease.
Net investment loss (income) changed by $3.2 million driven by market volatility during the current quarter, including $2.6 million on investments held in the non-qualified deferred compensation plan and $0.6 million related to other corporate investments.
Equity in income of investments in real estate partnerships increased by $2.5 million mainly due to increases from occupancy and positive rental spreads on new and renewal leases at properties held in the unconsolidated real estate partnerships.
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders
:
Three months ended March 31,
(in thousands)
2025
2024
Change
Net income
$
111,853
112,658
(805
)
Income attributable to noncontrolling interests
(2,266
)
(2,884
)
618
Net income attributable to the Company
109,587
109,774
(187
)
Preferred stock dividends
(3,413
)
(3,413
)
-
Net income attributable to common shareholders
$
106,174
$
106,361
$
(187
)
Net income attributable to exchangeable operating partnership units
(642
)
(642
)
-
Net income attributable to common unit holders
$
106,816
107,003
(187
)
Supplemental Earnings Information on Non-GAAP Financial Measures
We use certain non-GAAP financial measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the operating results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP financial measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP financial measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP financial measures could change. See "Non-GAAP Financial Measures" at the beginning of this Management's Discussion and Analysis.
We do not consider non-GAAP financial measures as an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided, including as set forth below. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects.
34
Pro-rata Same Property NOI (Non-GAAP Financial Measures):
Three months ended March 31,
(in thousands)
2025
2024
Change
Base rent
$
279,486
269,154
10,332
Recoveries from tenants
99,937
93,597
6,340
Percentage rent
7,413
8,523
(1,110
)
Termination fees
2,325
1,842
483
Uncollectible lease income
(420
)
(1,394
)
974
Other lease income
4,683
4,602
81
Other property income
2,711
2,675
36
Total real estate revenue
396,135
378,999
17,136
Operating and maintenance
68,026
64,199
3,827
Termination expense
—
70
(70
)
Real estate taxes
50,564
48,501
2,063
Ground rent
3,722
4,237
(515
)
Total real estate operating expenses
122,312
117,007
5,305
Pro-rata same property NOI
$
273,823
261,992
11,831
Less: Termination fees
2,325
1,772
553
Pro-rata same property NOI, excluding termination fees
$
271,498
260,220
11,278
Pro-rata same property NOI growth, excluding termination fees
4.3
%
Pro-rata same property NOI, excluding termination fees/expenses, changed from the following major components:
Total real estate revenue increased by $17.1 million, on a net basis, as follows:
•
Base rent increased by $10.3 million due to rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy, as well as redevelopment projects completing and operating.
•
Recoveries from tenants increased by $6.3 million due to higher recoverable expenses and increased occupancy.
•
Percentage rent decreased $1.1 million due to fluctuations in tenant sales.
Total real estate operating expenses increased by $5.3 million, on a net basis, as follows:
•
Operating and maintenance increased by $3.8 million primarily due to increases in common area maintenance and other tenant-recoverable costs.
•
Real estate taxes increased by $2.1 million due to an increase in real estate assessments across the portfolio.
Reconciliation of Pro-rata Same Property NOI to Net Income Attributable to Common Shareholders:
Three months ended March 31,
(in thousands)
2025
2024
Net income attributable to common shareholders
$
106,174
106,361
Less:
Management, transaction, and other fees
(6,812
)
(6,396
)
Other
(1)
(13,689
)
(12,587
)
Plus:
Depreciation and amortization
96,774
97,585
General and administrative
21,600
26,132
Other operating expense
1,688
2,643
Other expense, net
48,673
29,214
Equity in income of investments in real estate excluded from NOI
(2)
13,451
13,689
Net income attributable to noncontrolling interests
2,266
2,884
Preferred stock dividends and issuance costs
3,413
3,413
NOI
$
273,538
262,938
Less non-same property NOI
285
(946
)
Pro-rata same property NOI
$
273,823
261,992
(1)
Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2)
Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.
35
Nareit FFO, Core Operating Earnings and AFFO (Non-GAAP Financial Measures):
Our reconciliation of net income attributable to common shareholders to Nareit FFO, to Core Operating Earnings, and to AFFO is as follows:
Three months ended March 31,
(in thousands, except share information)
2025
2024
Reconciliation of Net income attributable to common shareholders to Nareit FFO
Net income attributable to common shareholders
$
106,174
106,361
Adjustments to reconcile to Nareit FFO:
(1)
Depreciation and amortization (excluding FF&E)
104,034
104,372
Gain on sale of real estate, net of tax
(101
)
(11,408
)
Exchangeable operating partnership units
642
642
Nareit FFO attributable to common stock and unit holders
$
210,749
199,967
Reconciliation of Nareit FFO to Core Operating Earnings
Nareit FFO
$
210,749
199,967
Adjustments to reconcile to Core Operating Earnings:
(1)
Not Comparable Items
Merger transition costs
—
2,561
Loss on early extinguishment of debt
—
180
Certain Non-Cash Items
Straight-line rent
(6,513
)
(5,738
)
Uncollectible straight-line rent
376
656
Above/below market rent amortization, net
(6,461
)
(5,467
)
Debt and derivative mark-to-market amortization
1,292
909
Core Operating Earnings
$
199,443
193,068
Reconciliation of Core Operating Earnings to AFFO:
Core Operating Earnings
$
199,443
193,068
Adjustments to reconcile to AFFO
(1)
:
Operating capital expenditures
(23,753
)
(20,852
)
Debt cost and derivative adjustments
2,129
2,140
Stock-based compensation
5,443
4,640
AFFO
$
183,262
178,996
(1)
Includes Regency's Pro-rata share of unconsolidated investment partnerships, net of Pro-rata share attributable to noncontrolling interests.
Liquidity and Capital Resources
General
We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash flows from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT.
Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership, its subsidiaries, or by our real estate partnerships. The Operating Partnership is a co-issuer and a guarantor of the $200 million of outstanding debt of our Parent Company. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity, and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units.
We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flows from operations after funding our common stock and preferred stock dividends, borrowings from our Line, proceeds from sale of real estate, mortgage loan and unsecured bank financing, distributions received from our real estate partnerships, and when the capital markets are favorable, proceeds from sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, due to the current interest rate environment.
36
Given the elevated interest rate environment, we are actively monitoring market conditions and evaluating strategies to mitigate interest rate risk. These strategies may include the use of interest rate swaps, caps, or forward-starting hedges to lock in rates on future debt issuances or refinancings. We are also prioritizing refinancing of maturing debt with long-duration fixed-rate debt where appropriate, to minimize future exposure to rate volatility.
We have $430.3 million of loan maturities during the next 12 months, including $250 million of unsecured public debt maturing in November 2025, and Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. We currently expect to address these maturing obligations through a combination of refinancing, available liquidity under our Line, and proceeds from potential property sales. We continually monitor capital markets and proactively manage our debt maturity profile to maintain a strong balance sheet and financial flexibility.
Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, although, in the longer term, we can provide no assurances.
In addition to our $75.1 million of unrestricted cash, we have the following additional sources of capital available:
(in thousands)
March 31, 2025
ATM program
Original offering amount
$
500,000
Available capacity
(1)
$
400,000
Line of credit
Total commitment amount
$
1,500,000
Available capacity
(2)
$
1,224,940
Maturity
(3)
March 23, 2028
(1)
During November and December 2024, we entered into forward sale agreements with respect to 1,339,377 shares that were sold in several tranches at a weighted average offering price of $74.66 per share before any underwriting discount and offering expenses. These shares are pledged under forward sale agreements and must be settled within one year of their trade dates, which vary by agreement and are expected to result in net proceeds of approximately $100 million. After giving effect to this forward equity offering as of March 31, 2025, $400 million of common stock remains available for issuance under the ATM program authorized by the Company's Board of Directors, which is subject to change at the discretion of the Board.
(2)
Net of letters of credit issued against our Line.
(3)
The Company has the option to extend the maturity for two additional six-month periods.
While future dividends on shares of our common stock will be determined at the discretion of our Board of Directors, we plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for federal income tax purposes. We have historically generated sufficient cash flows from operations to fund our dividend distributions. During the three months ended March 31, 2025 and 2024, we generated cash flows from operations of $161.0 million and $167.8 million, respectively, and paid $131.9 million and $127.7 million in dividends to our common and preferred stock and unit holders.
We currently have development and redevelopment projects in various stages of planning, design and construction, along with a pipeline of potential projects for future development or redevelopment. We estimate that we will require capital during the next 12 months of approximately $856.2 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our real estate partnerships, and repaying maturing debt. These capital requirements may be impacted by tariffs and inflation, as well as potential shortages of labor employed by contractors, resulting in increased costs of construction materials, labor, and services from third-party contractors and suppliers. We continue to implement mitigation strategies including, but not limited to, entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor and material shortages may extend the time to completion of these projects.
If we start new developments or redevelopments, commit to property acquisitions, repay debt prior to maturity, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease.
We endeavor to maintain a high percentage of unencumbered assets. As of March 31, 2025, 89.4% of our wholly-owned real estate assets were unencumbered. Our low level of encumbered assets allows us to more readily access the secured and unsecured debt markets and to maintain borrowing capacity on the Line.
37
Our Line and unsecured debt require that we remain in compliance with various customary financial covenants, which are described in the Notes to Consolidated Financial Statements included in our 2024 Form 10-K. We were in compliance with these covenants at March 31, 2025, and expect to remain in compliance.
Summary of Cash Flow Activity
The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:
Three months ended March 31,
(in thousands)
2025
2024
Change
Net cash provided by operating activities
$
161,031
167,758
(6,727
)
Net cash used in investing activities
(180,148
)
(142,336
)
(37,812
)
Net cash provided by financing activities
35,770
113,325
(77,555
)
Net change in cash, cash equivalents, and restricted cash
$
16,653
138,747
(122,094
)
Total cash, cash equivalents, and restricted cash
$
78,537
230,101
(151,564
)
Net cash provided by operating activities:
Net cash provided by operating activities decreased $6.7 million due to:
•
$5.8 million decrease in cash from operations due to the timing of receipts and payments
•
$0.9 million decrease in operating cash flow distributions from Investments in real estate partnerships.
Net cash used in investing activities:
Net cash used in investing activities changed by $37.8 million as follows:
Three months ended March 31,
(in thousands)
2025
2024
Change
Cash flows from investing activities:
Acquisition of operating real estate, net of cash acquired of $787
$
(83,232
)
—
(83,232
)
Real estate development and capital improvements
(101,386
)
(60,850
)
(40,536
)
Proceeds from sale of real estate
—
30,033
(30,033
)
Proceeds from property insurance casualty claims
—
4,110
(4,110
)
Issuance of notes receivable
—
(29,830
)
29,830
Collection of notes receivable
120
1,561
(1,441
)
Investments in real estate partnerships
(230
)
(4,156
)
3,926
Return of capital from investments in real estate partnerships
—
3,152
(3,152
)
Dividends on investment securities
988
122
866
Purchase of investment securities
(2,233
)
(92,527
)
90,294
Proceeds from sale of investment securities
5,825
6,049
(224
)
Net cash used in investing activities
$
(180,148
)
(142,336
)
(37,812
)
Significant changes in investing activities include:
•
We paid $83.2 million in 2025 to purchase two operating properties and one operating outparcel. One of the operating properties was previously held in an a single property unconsolidated real estate investment partnership in which we held a 66.7% ownership interest.
•
During 2025, we invested $40.5 million more on real estate development, redevelopment, and capital improvements, as further detailed in a table below.
•
There were no sales of real estate in 2025 compared to one operating property in 2024 for proceeds of $30.0 million.
•
We received additional property insurance claim proceeds of $4.1 million in 2024 primarily attributable to a single property that was impacted by a weather event in 2019.
•
During 2024, in connection with a secured lending transaction entered into by the Company, we issued a note receivable in the amount of $29.8 million at an interest rate of 6.8% maturing in January 2027, secured by a grocery-anchored shopping center.
38
•
Investments in real estate partnerships:
o
In 2025, we invested $0.2 million to fund our share of development and redevelopment activities.
o
In 2024, we invested $4.2 million, to fund our share of development and redevelopment activities.
•
Return of capital from our unconsolidated investments in real estate partnerships includes sales or financing proceeds.
o
During 2024, we received $3.2 million from our share of proceeds from debt financing activities.
•
Purchase of securities and proceeds from sale of securities pertain to investment activities held in our captive insurance company and our deferred compensation plan. Additionally, in 2024, we invested approximately $90 million in commercial deposits from the proceeds received from the January 2024 public offering of senior unsecured notes.
We plan to continue developing and redeveloping shopping centers for long-term investment. During the three months ended March 31, 2025, we deployed capital of $101.4 million for the development, redevelopment, and capital improvement of our real estate properties, comprised of the following:
Three months ended March 31,
(in thousands)
2025
2024
Change
Capital expenditures:
Land acquisitions
$
—
7,836
(7,836
)
Building and tenant improvements
19,094
17,914
1,180
Redevelopment costs
35,344
19,938
15,406
Development costs
38,721
9,113
29,608
Capitalized interest
1,653
1,622
31
Capitalized direct compensation
6,574
4,427
2,147
Real estate development and capital improvements
$
101,386
60,850
40,536
•
We acquired one land parcel for development in 2024.
•
Building and tenant improvements increased $1.2 million in 2025, primarily related to the timing and volume of capital projects.
•
Redevelopment costs are higher than prior year. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisitions, existing building expansions, facade renovations, new out-parcel building constructions, and redevelopments related tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. The timing and duration of these projects could also result in volatility in NOI. See the tables below for more details about our redevelopment projects.
•
Development costs are higher in 2025 due to the progress towards completion of our development projects in process. See the tables below for more details about our development projects.
•
Interest is capitalized on our development and redevelopment projects and is based on cumulative actual costs incurred. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor tenant opens for business. If we reduce our development and redevelopment activity, the amount of interest that we capitalize may be lower than historical averages.
•
We have a dedicated staff of employees who directly support our development program, which includes redevelopment of our existing properties. Internal compensation costs directly attributable to these activities are capitalized as part of each project.
39
The following table summarizes our development projects in-process and completed:
(in thousands, except cost PSF)
March 31, 2025
Property Name
Market
Ownership
(1)
Start
Date
Estimated
Stabilization
Year
(2)
Estimated / Actual Net
Development
Costs
(1) (3)
GLA
(1)
Cost PSF
of GLA
(1) (3)
% of Costs Incurred
Developments In-Process
Baybrook East - Phase 1B
Houston, TX
50%
Q2-2022
2026
9,792
77
127
89
%
Sienna Grande - Phase 1
Houston, TX
75%
Q2-2023
2027
9,409
23
409
83
%
The Shops at SunVet
Long Island, NY
100%
Q2-2023
2027
92,863
172
540
67
%
The Shops at Stone Bridge
Cheshire, CT
100%
Q1-2024
2027
68,277
155
440
57
%
Jordan Ranch Market
Houston, TX
50%
Q3-2024
2027
23,006
81
284
40
%
Oakley Shops at Laurel Fields
Bay Area, CA
100%
Q3-2024
2027
35,500
78
455
34
%
Total Developments In-Process
$
238,847
586
408
58
%
(1)
Estimated net development costs and GLA are reported based on Regency’s ownership interest in the real estate partnership at completion.
(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)
Includes leasing costs and is net of tenant reimbursements.
The following table summarizes our redevelopment projects in process and completed:
(in thousands, except cost PSF)
March 31, 2025
Property Name
Market
Ownership
(1)
Start Date
Estimated Stabilization Year
(2)
Estimated Net
Project Costs
(1) (3)
% of Costs Incurred
Redevelopments In-Process
Bloom on Third
Los Angeles, CA
35%
Q4-2022
2027
$
24,525
60
%
Serramonte Center - Phase 3
San Francisco, CA
100%
Q2-2023
2025
36,989
32
%
Circle Marine Shops & Marketplace
Los Angeles, CA
100%
Q3-2023
2025
14,986
87
%
Avenida Biscayne
Miami, FL
100%
Q4-2023
2026
22,743
56
%
Cambridge Square
Atlanta, GA
100%
Q4-2023
2026
14,377
65
%
Anastasia Plaza
Jacksonville, FL
100%
Q3-2024
2026
15,607
14
%
East Meadow Plaza - Phase 1
Long Island, NY
100%
Q3-2024
2026
11,736
53
%
West Chester Plaza
Cincinnati, OH
100%
Q4-2024
2028
15,442
34
%
Willows Shopping Center
Bay Area, CA
100%
Q4-2024
2027
16,807
11
%
Various Redevelopments
Various
20% - 100%
Various
Various
86,463
42
%
Total Redevelopments In-Process
$
259,675
44
%
Redevelopments Completed
Various Properties
Various
40% - 100%
Various
Various
5,279
93
%
Total Redevelopments Completed
$
5,279
93
%
(1)
Estimated net development costs are reported based on Regency’s ownership interest in the real estate partnership at completion.
(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)
Includes leasing costs and is net of tenant reimbursements.
40
Net cash provided by financing activities:
Net cash flows provided by financing activities decreased by $77.6 million during 2025, as follows:
Three months ended March 31,
(in thousands)
2025
2024
Change
Cash flows from financing activities:
Tax withholding on stock-based compensation
$
(6,760
)
(8,730
)
1,970
Contributions from noncontrolling interests
2,977
1,472
1,505
Distributions to and redemptions of noncontrolling interests
(3,510
)
(4,364
)
854
Dividend payments and operating partnership distributions
(131,870
)
(127,662
)
(4,208
)
Proceeds from (repayment of) unsecured credit facilities, net
200,000
(122,000
)
322,000
Proceeds from issuance of fixed rate unsecured notes, net of debt discount
10,000
398,468
(388,468
)
Debt repayment
(35,335
)
(10,780
)
(24,555
)
Payment of loan costs
(194
)
(13,289
)
13,095
Proceeds from sale of treasury stock
462
210
252
Net cash provided by financing activities
$
35,770
113,325
(77,555
)
Significant financing activities during the three months ended March 31, 2025 and 2024, include the following:
•
The taxes withheld in conjunction with vesting of equity award plans to satisfy employee tax withholding requirements totaled $6.8 million and $8.7 million during 2025 and 2024, respectively.
•
During 2025, we received $3.0 million in contributions for the limited partners' share of development funding compared to $1.5 million in 2024.
•
During 2025, we distributed $3.5 million to limited partners, including proceeds to partially redeem a non-controlling interest in one real estate partnership, compared to $4.4 million in 2024.
•
We paid $4.2 million more in dividends as a result of an increase in our dividend rate per share and the number of shares of our common stock outstanding.
•
We had the following debt related activity during 2025:
o
We drew $200.0 million in net proceeds from our Line,
o
We received $10.0 million in proceeds from a mortgage refinancing,
o
We paid $35.3 million for debt repayments, including:
▪
$32.8 million for repaying two mortgage loans at maturity, and
▪
$2.5 million in principal mortgage payments.
•
We had the following debt related activity during 2024:
o
We had $122.0 million in net repayments on our Line,
o
We received $398.5 million in proceeds from issuing unsecured public debt,
o
We paid $10.8 million for debt repayments, including:
▪
$3.2 million in principal mortgage payments, and
▪
$7.6 million for repaying one mortgage loan ahead of maturity,
o
We paid $13.3 million in loan costs relating to the recast of the Line as well as the unsecured public debt offering.
41
Investments in Real Estate Partnerships
The following table is a summary of the unconsolidated combined assets and liabilities of our real estate partnerships and our Pro-rata share:
Combined
Regency's Share
(1)
(dollars in thousands)
March 31, 2025
December 31, 2024
March 31, 2025
December 31, 2024
Number of real estate partnerships
18
19
Regency's ownership
12% - 83%
12% - 83%
Number of properties
102
103
Assets
$
2,808,448
2,843,157
$
1,042,939
1,061,072
Liabilities
1,653,665
1,676,507
607,030
616,718
Equity
1,154,783
1,166,650
435,909
444,354
Basis difference
(46,734
)
(45,310
)
Investments in real estate partnerships
$
389,175
399,044
(1)
Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of our investments in real estate partnership activities on our operations, which includes such items on a single line presentation under the equity method in our Consolidated Financial Statements.
Our equity method investments in real estate partnerships consist of the following:
(in thousands)
Regency's Ownership
March 31, 2025
December 31, 2024
GRI - Regency, LLC (GRIR)
40%
$
133,755
136,972
Columbia Regency Partners II, LLC (Columbia II)
20%
64,367
63,024
Columbia Village District, LLC
30%
6,540
6,434
Individual Investors
Ballard Blocks
50%
59,153
59,596
Bloom on Third
35%
45,166
44,715
Others
(1)
12% - 83%
80,194
88,303
Total Investment in real estate partnerships
$
389,175
$
399,044
(1)
Effective January 1, 2025, we acquired our partner’s 33.3% share in a single property partnership for a total purchase price of $10.3 million. Following this acquisition, the Company now owns 100% of this property, and the property has been consolidated into the Company’s financial statements.
Notes Payable - Investments in Real Estate Partnerships
Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows:
(in thousands)
March 31, 2025
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
Mortgage
Loan
Maturities
Unsecured
Maturities
Total
Regency’s
Pro-Rata
Share
2025
(1)
$
5,227
126,012
—
131,239
44,162
2026
6,989
281,683
48,300
336,972
116,077
2027
7,152
32,800
—
39,952
13,386
2028
3,935
231,235
—
235,170
81,559
2029
2,841
93,500
—
96,341
34,967
Beyond 5 Years
3,847
711,324
—
715,171
280,111
Net unamortized loan costs, debt premium / (discount)
—
(7,888
)
—
(7,888
)
(2,928
)
Total
$
29,991
1,468,666
48,300
1,546,957
567,334
(1)
Reflects scheduled principal payments and maturities for the remainder of the year.
At March 31, 2025, our investments in real estate partnerships had notes payable of $1.5 billion maturing through 2034, of which 91.8% had a weighted average fixed interest rate of 3.9%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 6.5%, based on rates as of March 31, 2025. These fixed and variable rate notes payable are all non-recourse, and our Pro-rata share was $567.3 million as of March 31, 2025. As notes payable mature, they will be repaid from proceeds from new borrowings and/or partner capital contributions. Refinancing debt at maturity in the current interest rate environment could result in higher interest expense in future periods if rates remain elevated.
42
We are obligated to contribute our Pro-rata share to fund maturities if the loans are not refinanced, and we have the capacity to do so from existing cash balances, availability on our line of credit, and operating cash flows. We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a real estate investment partner is unable to fund its share of the capital requirements of the real estate partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call which would be secured by the partner's membership interest.
Management fee income
In addition to earning our share of net income or loss in each of these real estate partnerships, we receive fees as follows:
Three months ended March 31,
(in thousands)
2025
2024
Management, transaction, and other fees
$
6,812
6,396
Critical Accounting Estimates
There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.
Item
3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to two significant components of interest rate risk:
•
Under the Line, we have a variable interest rate that, as of March 31, 2025, was based upon an annual rate of SOFR plus a 0.10% market adjustment ("Adjusted SOFR") plus an applicable margin of 0.715%. SOFR rates charged on our Line change monthly, and the applicable margin on the Line is dependent upon maintaining specific credit ratings or leverage targets, as well as meeting specific sustainability target thresholds. If our credit ratings were downgraded or if we fail to meet the leverage targets or sustainability target thresholds, the applicable margin on the Line would increase, resulting in higher interest costs. As of March 31, 2025 the Adjusted SOFR plus the applicable margin of 0.715% was 5.165%.
•
We are also exposed to changes in interest rates when we refinance our existing long-term fixed rate debt. The objective of our interest rate risk management program is to limit the impact of interest rate changes on earnings and cash flows. To achieve these objectives, we borrow primarily at fixed interest rates and may enter into derivative financial instruments such as interest rate swaps, caps, or treasury locks in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Our interest rate swaps are structured solely for the purpose of interest rate protection.
We continuously monitor the capital markets and evaluate our ability to issue new debt, to repay maturing debt, or to fund our commitments. We continue to believe, in light of our credit ratings, the available capacity under our unsecured credit facility, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we will be able to successfully issue new secured or unsecured debt to fund maturing debt obligations. It is uncertain the degree to which capital market volatility and higher interest rates will adversely impact the interest rates on any new debt that we may issue.
The table below presents the principal cash flows, weighted average interest rates of remaining debt, and the fair value of total debt as of March 31, 2025. For variable rate mortgages and unsecured credit facilities for which we have interest rate swaps in place to fix the interest rate, they are included in the Fixed rate debt section below at their all-in fixed rate. The table is presented by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Although the average interest rate for variable rate debt is included in the table, those rates represent rates that existed as of March 31, 2025, and are subject to change. In addition, we continually assess the market risk for floating rate debt and believe that an increase of 100 basis points in interest rates would decrease future earnings and cash flows by approximately $2.7 million per year based on $274.6 million of floating rate mortgage debt and floating rate line of credit balances outstanding at March 31, 2025.
Further, the table below incorporates only those exposures that exist as of March 31, 2025, and does not consider exposures or positions that could arise after that date or obligations repaid before maturity. Since firm but unused commitments are not presented, the table has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and actual interest rates.
43
The table below presents the principal cash flow payments associated with our outstanding debt by year, weighted average interest rates on debt outstanding at each year-end, and fair value of total debt as of March 31, 2025.
(dollars in thousands)
2025
2026
2027
2028
2029
Thereafter
Total
Fair Value
Fixed rate debt
(1)
$
273,545
358,173
754,996
357,583
524,906
2,133,636
4,402,839
4,203,641
Average interest rate for all fixed rate debt
(2)
4.11
%
4.13
%
4.24
%
4.22
%
4.48
%
4.78
%
Variable rate SOFR debt
(1)
$
90
120
3,870
270,525
—
—
274,605
274,761
Average interest rate for all variable rate debt
(2)
5.21
%
5.21
%
5.20
%
5.20
%
(1)
Reflects amount of debt maturities during each of the years presented as of March 31, 2025.
(2)
Reflects weighted average interest rates of debt outstanding at the end of each year presented. For variable rate debt, the rate as of March 31, 2025, was used to determine the average interest rate for all future periods.
44
Item
4. Controls and Procedures
Controls and Procedures (Regency Centers Corporation)
Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the quarter ended March 31, 2025 which have materially affected, or are reasonably likely to materially affect, the Parent Company’s internal controls over financial reporting.
Controls and Procedures (Regency Centers, L.P.)
Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that the Operating Partnership's disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the quarter ended March 31, 2025 which have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal controls over financial reporting.
45
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
See Note 13 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. "Legal Proceedings" of our 2024 Form 10-K.
Item
1A. Risk Factors
In addition to the information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report”) and the additional risk factor identified during 2025 detailed below:
Evolving political and economic events and uncertainties, including tariffs, retaliatory tariffs, international trade disputes, and immigration policies could adversely impact the businesses of our tenants and our business
.
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be influenced by evolving political, economic, trade and immigration policies and macroeconomic uncertainties, and the success of the Company's tenants, in the aggregate, is important to the operating and financial success of the Company. These issues include, but are not limited to, the potential for impacts from tariffs and potential trade disputes, retaliatory actions by other countries, inflation, the cost and availability of labor, including labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of credit. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, the current Middle East conflicts and wars, and economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer confidence and spending. The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, could result in adverse impacts on the U.S. economy, including inflation, reduction in consumer confidence and spending, a slowing of growth, and potentially a recession, thereby adversely impacting the costs to our tenants of operating their businesses, demand for their products and services, and their ability to pay rent, and/or decreasing future demand for space in shopping centers, which could adversely impact occupancy rates and rents. The potential impact of current macroeconomic and geopolitical uncertainties on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities during the three months ended March 31, 2025.
The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended March 31, 2025:
Period
Total number of shares purchased
(1)
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs
(2)
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)
(2)
January 1 through January 31, 2025
—
$
—
—
$
250,000
February 1 through February 28, 2025
95,361
$
70.89
—
$
250,000
March 1 through March 31, 2025
—
$
—
—
$
250,000
(1)
Represents shares repurchased to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency’s Long-Term Omnibus Plan.
(2)
Our Board has authorized a common stock repurchase program under which we may purchase up to a maximum of $250 million of our outstanding common stock through open market purchases, and/or in privately negotiated transactions. The timing and price of stock repurchases will be dependent upon market conditions and other factors. Any stock repurchased, if not retired, will be treated as treasury stock. This program will expire on June 30, 2026, unless modified, extended or earlier terminated by the Board in its discretion
.
46
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended March 31, 2025
,
none
of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).
47
Item 6.
Exhibits
Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298 (Regency Centers Corporation) and No. 000-24763 (Regency Centers, L.P.).
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema with embedded linkbases document
104.
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*
Furnished, not filed.
48
SI
GNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
May 2, 2025
REGENCY CENTERS CORPORATION
By:
/s/ Michael J. Mas
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
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